Arch to acquire major stake in Coface

Arch Capital Group is acquiring a 29.5 percent stake in Coface, a France-based leader in the global trade credit insurance market.

Arch has entered into a share purchase agreement with Natixis regarding the acquisition, which will be completed at €10.70 per share, or approximately €480 million, based on the current number of shares.

Natixis’ seven representatives on Coface’s board of directors will resign and be replaced by four Arch nominees, leaving Coface with a majority of independent directors on its board. Coface will seek a new independent board member and will appoint a chairman of the board from among the independent board members, it said.

Marc Grandisson, Arch’s chief executive officer, said the re/insurer is looking to make “a long-term, strategic investment in Coface” as part of its strategy to develop uncorrelated sources of underwriting income. Arch has indicated that it does not intend to seek control of Coface for a period of 12 months after the closing of the transaction.

The transaction is not expected to lead to any job losses at Coface. Grandisson said: “We support Coface’s management team and are aligned with their strategic plan.”

Grandisson emphasised the cultural compatibility between the two firms. “Our companies share a focus on specialty underwriting where knowledge and expertise create value for our clients, and trade credit contributes to Arch’s specialty-driven business model,” he said.

The transaction remains subject inter alia to antitrust and regulatory approval, including by the French prudential regulator, the Autorité de Controle Prudentiel et de Résolution.